Construction Law

Editor:Paul J. Odum, Esquire

Damages in Plaintiffs' breach of contract claims were
properly awarded by the trial court where those damages were based on
the costs incurred by Plaintiffs to repair two defective septic systems
installed by Defendant, and Plaintiffs had no burden to demonstrate
that the cost of repair was less than the diminution in value to the
real estate resulting from the defective septic systems.Cason v. King, No. 30183 (Mo. App. S.D., November 18, 2010), Burrell, J.
Defendant appealed a judgment that included $8,400 awarded to
Plaintiffs for their costs to repair defective septic systems installed
by Defendant on grounds that Plaintiffs produced insufficient evidence
to support the damage award. Specifically, Defendant argued that
while Plaintiffs provided evidence of the cost of repair of the
systems, proof of damage was insufficient because Plaintiffs adduced no
evidence regarding the diminution in land value. Defendant cited a
line of construction defect cases that included language prohibiting a
trial court from awarding cost of repair damages until after it hears
evidence that the cost of repair is less than the diminution in
property value.
The court acknowledged that existing case law does not consistently
express the damage rule that a trial court should apply in construction
defect cases. The court included a summary of multiple cases on the
subject and analyzed two lines of decisions, one line that required
evidence of diminution in value to sustain a damage award, and another
line of cases where such evidence was not required. The court resolved
this inconsistency by adopting the rule that in contract claims
involving construction defects, a plaintiff may prove damages solely
with cost of repair evidence and a plaintiff is not required to produce
evidence of diminution in land value except to rebut a defendant's
evidence that the cost of repair was disproportionate to the diminution
in value of the property.
It is important to note that the court's decision may only apply to
breach of contract cases. The court points out that some of the cases
that led to the confusion concerning proof of damages in construction
defect cases were based on theories of negligence, implied warranty and
nuisance and there is no indication that the court's decision would
apply equally to those theories.